Opinion

There is a time to hike interest rates, but not now

Cameron Bagrie
Wed, 10 Mar 2021

The interest rate on a savings account was about 0.4% in October last year and has dropped since.

Cameron Bagrie
Wed, 10 Mar 2021

Interest rates are still depressed but are well above their lows. Will borrowing rates follow? They should not, given a plethora of cheap funding at banks' feet, though banks may choose to step away from offering low five-year rates.The Reserve Bank of New Zealand still has the pedal to the metal buying bonds, offering cheap funding to banks, maintaining the official cash rate at 0.25% and dangling the possibility of the OCR going negative if needed.Covid uncertaintiesThe recovery is still contingent on considerable monetary policy sup...

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Productivity concerns and signs of stagflation

Inflation is to be expected in New Zealand, and whilst costs and prices rise, output capacity appears constrained, at least in the short-term; raising the possibility of stagflation.

There is a time to hike interest rates, but not now

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